As if drivers don’t have enough hazards to contend with these days, you should be on alert for those official-looking letters that arrive at your home warning that your vehicle’s warranty is about to expire and offering a sweet deal to extend it.
The Maryland Attorney General’s office has issued an advisory that deceptive extended warranty offers could soon be filling mailboxes in high numbers again because of a recent change in state law. But it’s not just Maryland. These shady offers — typically from third-party marketers and agents– appear from time to time almost anywhere people own cars.
The offers usually come packaged with an ominous alert that your vehicle’s warranty is about to expire and a toll-free number to call. The letter also includes just enough information about the make and model of your vehicle to convince you there’s a problem. At first glance, the letters might seem as if the offer’s on the up and up, perhaps a notice from the dealer who sold you the vehicle or the manufacturer. In Wisconsin a couple years ago, for example, the offers came dressed up like official notices from the Department of Motor Vehicles, with a picture of the state seal that was close but not quite the real thing.
The offers usually say your warranty has expired or is about to expire even if that’s nowhere close to the truth. The contract you sign up for could also exclude so many items from coverage that you’d be wasting your money to buy them.
One of the most notorious such scams got rolling in Missouri in 2005. U.S. Fidelis, which had also been known as National Auto Warranty and Dealer Services, posed as an agent to sell extended vehicle warranties to more than 400,000 consumers in the United States, including approximately 17,000 Marylanders.
In 2010, Maryland joined several other states and the District of Columbia in taking legal action against U.S. Fidelis. The company declared bankruptcy, and its owners were indicted by a Missouri grand jury on charges of unlawful merchandizing, theft and insurance fraud, the Maryland Attorney General’s office said.
Maryland officials expressed concern that deceptive offers like these could flood people’s mailboxes again. That’s because, prior to Oct. 1, only warranty issuers or dealerships could offer extended warranties, said Christine Tobar, a spokeswoman for Maryland Attorney General Brian E. Frosh. Now, however, agents, warrantors and dealerships can offer them. Dealerships must be listed with the state’s Motor Vehicle Administration, and warrantors have to be registered with the Maryland Insurance Administration. But agents only have to be listed with a dealership, she said.
“You can track the warranty company, but you can’t necessarily track the agent,” Tobar said in an email. “So it opens the door to these scams coming back.”
The attorney general’s office urges you to call your dealer first to check whether your warranty has expired. You can also check out the company with the attorney general’s office or the Better Business Bureau. For more information, you can also go to the Federal Communications Commission.
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